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Johannesburg - The rand extended recent losses to a fresh seven month low against the dollar on Monday, and was expected to remain under pressure ahead of inflation data and the central bank's rate decision later in the week.
The rand has weakened more than 2% over the past week, reflecting a stronger dollar as investors bet on the US Federal Reserve tightening policy sooner than earlier expected.
The rand hit a trough of R11.0690, its softest since February 20, and was at R11.0665 by 08:50, down 0.5% from Friday's close in New York.
Government bonds weakened alongside the currency, pulling the yield on the 2026 benchmark 3 basis points higher to 8.29%.
READ: Sarb hikes repo rate
The Reserve Bank's policy statement on Thursday will be key, with the majority of economists polled by Reuters expecting the benchmark repo rate to stay on hold at 5.75% after a 25 basis point increase in July.
This could weigh on the rand, particularly if the US Federal Reserve issues a hawkish statement on Wednesday. The inflation numbers are due the same day.
"After the recent strong US data and hints from policy makers, there is a chance that the Fed might change its guidance on when it will raise rates," Rand Merchant Bank analyst John Cairns said.
"If they do, expect a push higher in US yields and a push stronger in the dollar - and significant rand weakness."
